Externally Yours....moving iTunes

I'd like to know EXACTLY how to get my iTunes off my main computer's drive (to free up space) and over to an external and operate iTunes from there.
I have an older eMac running OS10.3.9 and iTunes 7. I tried to do this at first myself by just dragging my iTunes music folder over to the external and changing the iTunes advanced preferences to the external, but that didn't work......when I went to play songs that I had deleted off my main drive (just a few as a test that were now stored on the external), I got the "can't locate-exclamation mark" message. I moved everything back and reloaded the few songs I'd deleted and everything's back to normal....but also back on the main hard drive.
I've since talked to three Mac techs....two by phone and one at an Apple store. Two said my mistake was that I didn't drag the ENTIRE iTunes (not just the music sub-folder) folder over to the external. They said it should be as simple as that. Just do that, change the preferences to the external and I should be good to go. Is it that simple?
An advice page on the Apple site says nothing about dragging your file over. It's sort of change your iTunes preference over to the external, and then the "consolidate " function moves/copies things for you. But it still seems rather simple - although the "can't be undone" part is a bit foreboding. As I understand it, this method moves only the content, keeping a library database still on the main drive. A longer explanation of this procedure I found says it's preferable to the one above for large song libraries (mine's13,000+). Says that even a few songs out of whack in your library could foul up the whole process mentioned in the previous paragraph. It also suggest that a backup of the database is a good idea if you do want to "undo" as that gets updated with the new location. Is the database the file labeled iTunes Music Library.xml? The article says it ends in ".itl", but maybe that's for a PC?
This morning an Apple phone tech said that as far as he knew, iTunes would not operate off an external at all!
Anyone have any advice....thanks !

Copy the entire iTunes folder to the external.
Click the iTunes icon to launch it then immediately press and hold Option.
Select Choose existing library then pick the iTunes library file on the external.
That's it.
Thanks, Chris....
When you say to click on the iTunes icon, do you mean the one in the toolbar, or one somewhere now on the external? And do you press the option button after or before launching? Or does it matter.....
Is what that is doing essentially the same as changing the iTunes destination thru the advanced preferences?
Here's a detailed set of instructions for transferring that I've seen linked to on the Apple site in a couple of places. This seems to be a bit different in steps, but is it essentially the same operation? To me, it implies the consolidation function is actually doing the moving, after you've redirected the location. There is no mention of dragging the entire iTunes folder anywhere.
Actually, somewhere in iTunes "help", what I believe is the same procedure is described - in a little less detail.
==================================
Consolidate Library: The Right Way
So, knowing that these pitfalls exist, what’s the best way? Remember that iTunes’ philosophy of managing your media is actually to insulate you from having to worry about the underlying file system. On the basis of this approach, it makes sense that it should provide the necessary tools itself to facilitate moving your library to a new location.
So in other words, rather than messing around copying/moving files through Finder or Windows Explorer, why not let iTunes deal with this for you? This is handled in iTunes through the Consolidate Library option, found under the Advanced menu in iTunes.
What the Consolidate Library option actually does it to essentially consolidate all of the files listed in your iTunes library into the iTunes Music folder. It does this by copying any referenced files into the iTunes Music folder, renaming them with the proper track name, and organizing them into its standard file and folder structure (ARTIST\ALBUM, essentially). This option is at least partly intended to allow you to bring “referenced” files into the iTunes Music folder from various other locations in the event that you may have added them to your library with the “Copy Files” option disabled.
However, the only real distinction between a file that is “managed” and a file that is “referenced” is the actual iTunes Music folder path. Files in this folder are considered managed by iTunes, and anything outside is a “referenced” file. So, if you change the location of the iTunes Music folder to a new path and then use the “Consolidate Library” option, iTunes will happily copy all of these files into your new location, updating all of the file location information in the iTunes database in the process.
Performing the Move
So, the actual process of moving your iTunes media content is quite straightforward:
First, go into your iTunes advanced preferences, and change the iTunes Music folder path to whatever new location you want your iTunes media files to be stored in. This will usually be an external hard drive, but it can be any valid path, including a secondary hard drive or even a network share:
Once you have updated the iTunes Music folder location, simply select Advanced, Consolidate Library:
iTunes will advise you that it is about to copy all of your content into the iTunes Music folder, and warn you that this cannot be undone.
Simply click “Continue” and iTunes will begin the process of copying the files into their proper locations and updating these locations in the iTunes library database.
Note that this process copies the tracks to the new location rather than moving them. Although the original tracks still exist, the iTunes library database is updated with the new location, which makes the process difficult to undo unless you have kept a backup of your iTunes library database from before the consolidation. Making such a backup is certainly an option, although not normally required.
The other important note is that this will reorganize your entire library file system into iTunes’ own way of laying it out (ALBUM\ARTIST\TRACK.MP3). This may not be a desirable option for those who have their media file system laid out in their own organizational structure, or who use other third-party applications that expect media files to be organized a certain way. Unfortunately, if you’re in this situation, there really is no easy way to move your iTunes media content without creating a whole new iTunes library and reimporting all of your tracks into the new library from their new locations.
Confirming and Cleaning Up
Once this process has completed, you should be able to confirm that the files have been copied to the new location and that iTunes is referencing them properly from there simply by selecting a track at random and choosing File, Get Info. The “Summary” tab for the file properties will indicate the physical location of that track, which should reflect the new iTunes Music folder path.
Since iTunes copies the media content rather than moving it, you will also likely want to delete the your iTunes media files from their original locations.
Remember that this process only moves the iTunes content however. Your iTunes library database will still be located in its original location, likely on your primary hard drive in your “Music” or “My Music” folder, as described above.
Thanks.

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